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Difficulty: HardSale of Goods Act: Transfer of Title, Delivery, and Buyer/Seller Remedies

Under the Sale of Goods Act, an unpaid seller's exercise of the right of lien over goods in their possession automatically rescinds the contract of sale and revests property in the seller.

Answer: Answer

Answer

False. The exercise of a right of lien by an unpaid seller retains possession but does not automatically rescind the contract of sale or revest ownership in the seller.
The statement is false because Section 48(1) of the Sale of Goods Act explicitly provides that a contract of sale is not rescinded by the mere exercise by an unpaid seller of his right of lien or retention.

Step-by-Step Solution

1
Analyze the legal nature of an unpaid seller's right of lien under the Sale of Goods Act.
A right of lien is a statutory possessory remedy that allows an unpaid seller in possession of goods to hold onto them until the purchase price is paid or tendered.
Distinguishing between possession remedies and ownership remedies is essential in commercial law.
2
Examine the statutory effect of exercising a lien on the contract of sale and ownership.
Section 48(1) of the Sale of Goods Act explicitly states that exercising a right of lien does not operate to rescind the contract of sale.
Ownership/property remains with the buyer if it had already passed; the contract remains subsisting unless the seller exercises a lawful right of resale.

Key Concept

Effect of Unpaid Seller's Right of Lien on Contract of Sale
Estimated Time:1m 30s
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Topics

Sale of Goods Act: Transfer of Title, Delivery, and Buyer/Seller Remedies

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